E34 535i Compression Loss

Has anyone experienced similar to the following and can shed any light on the cause, before I either refit my cylinder head or take my piston out to
check the rings?
Compression test (engine cold & all plugs out) showed five cylinders within the range 175 to 185 psi, but number 4 cylinder was 110 psi. I squirted some oil in the plug hole and checked again an it went up to 135 psi.
On removing the head I can't find any reason for the drop - valves, head & block all appear fine. The bore does not have any undue marks and is still holding the oil that I squirted into it. The head gasket does not show any sign of leaking ( and there are no other signs such as oil in the water).
The vehicle has done 178k miles and this is the first time that the engine has been worked on other than tappet adjusting etc. I can refit the head ( now that I have re-ground the valves), assuming that the gasket has microscopic leaks with being so old, or should I check the piston first (and save the time & effort of having to take the head off again if the psi is still low)?
Any experienced input would be welcome.
TIA
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This is the classic sign of a broken or worn ring(s): the oil temporarily seals the rings/cylinder.

You should have done a leakdown test in addition to the compression check to more fully characterize the problem. It's almost certain that the rings need replacement.
FloydR
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